Analysis: Ethics panel may look into Menendez flights with donor

The scandal surrounding Sen. Bob Menendez continued to build Friday, with the Senate’s ethics committee showing an interest in the case and published reports indicating that Menendez pressed the State Department to help campaign contributor Salomon Melgen’s company in an overseas dispute.

But the new revelation, along with more lurid, unsubstantiated — and emphatically denied — allegations of Menendez trysts with prostitutes at Melgen’s resort home in the Dominican Republic, may not be the senator’s most immediate worry.

Rather, that could be the fallout from Menendez’s acceptance of free round-trip flights to the Dominican Republic in 2010 on a plane owned by Melgen, a deep-pockets donor whose Florida eye clinic was raided by the FBI this week for reasons that that could very well be unrelated to Menendez.

The flights expose Menendez to potential sanctions from the secretive Senate Select Committee on Ethics. Vice Chairman Johnny Isakson, R-Ga., said the committee is “aware of news reports regarding the FBI raid” and “will follow its established procedures in this matter.”

Those procedures could lead to no action, a public or private admonishment, or even a recommendation of expulsion, though that is unlikely. The committee may also wait to see if anything comes from the FBI investigation before making any decisions. And until it does something, it usually says nothing.

ABC News, citing anonymous sources, reported on Thursday that the raid in West Palm Beach was carried out by a federal health care task force investigating suspected Medicare fraud. It was begun after a document-shredding truck was seen at the building, the network reported.

Melgen’s attorney, Dean L. Willbur,said in a statement on Thursday that he did not know what the government was looking for but that Melgen “has acted appropriately at all times.”

The ABC report indicated that the raid was not focused on the prostitution allegations, which first arose in November when the conservative website The Daily Caller posted video recordings of women who said they were Dominican prostitutes who had sex with Menendez at parties at Melgen’s home.

More recently, an anti-Menendez website appeared that featured email exchanges about the prostitution allegations it attributed to an FBI agent in Florida and an anonymous tipster identified in emails as “Peter Williams.”

Most mainstream news outlets did not repeat the prostitution allegations until the FBI raid became public on Wednesday.

Menendez’s office says the prostitution allegations are false and manufactured by right-wing political opponents. The watchdog group Citizens for Responsibility and Ethics in Washington, which originally received emails from Williams and forwarded his information to the Justice Department and the FBI, also questioned the tipster’s veracity after he resisted efforts to speak by phone or in person, according to the organization’s executive director, Melanie Sloan.

Rep. Albio Sires, D-West New York, called the allegations an unsuccessful attempt to block Menendez from becoming chairman of the Senate Foreign Relations Committee.

“It is my belief that these allegations will soon be put to rest so the senator can continue to do what the people of New Jersey elected him to do,” Sires said.

But Menendez may have to make a fuller explanation of his advocacy for Melgen.

In July, as a Foreign Relations subcommittee chairman, Menendez convened a hearing on “doing business in Latin America.” A transcript shows that, at the hearing, he questioned a State Department official about what the administration was doing to help a company in the Dominican Republic “that has American investors.” The New York Times and The Miami Herald first reported on the hearing on Friday.

Menendez said the company, which he did not name, was being blocked by the Dominican government from carrying out a contract it had been awarded to X-ray outbound security containers at ports, according to the transcript.

Citing that contract and other business complaints with other countries, Menendez asked Matthew Rooney, a deputy assistant secretary of state, whether the United States would use its positions on the Inter-American Development Bank or the International Monetary Fund to “send a message” to countries that violate agreements.

The company with the Dominican screening contract is ICSSI, a Caribbean-based company in which Melgen bought an ownership interest in 2010, The Times and The Herald said.

The Times said the 20-year contract could be worth as much as $50 million annually.

Menendez has long been an advocate for scanning all U.S.-bound cargo at the ports of departure. His spokesman, Paul Brubaker, said the hearing in July was one of several the senator held advocating for more action to stop narcotics trafficking in Central America.

“Ultimately, it’s a national security matter because these drugs end up on our streets,” Brubaker said.

But Melgen has also been a top supporter of Menendez. He and his relatives gave $157,000 to political committees run by or benefiting Menendez in recent years. Melgen’s eye-care company also gave another $700,000 last year to a Democratic super PAC that spent $582,500 supporting Menendez’s successful reelection campaign.

Sloan, the director of the watchdog group that has pressed for ethics investigations into several members of Congress, said it is not necessarily a legal problem for Menendez.

“In order for that to be a problem — and I’m not saying it’s OK — you’d have to show quid pro quo, that the contributions were a direct result of his advocacy,” she said.

“I view this as a big problem throughout Washington, not just in this case,” she said.

The problem, she said, is our campaign-contribution system — “the people who give them money are the people they do things for.”

Beyond the contributions and the prostitution allegations, the issue that so far appears to fall most squarely within the ethics committee’s purview are two free round-trip flights to the Dominican Republic on Melgen’s private jet that Menendez took in 2010.

Such travel is prohibited in most circumstances, and one of the trips was cited in a complaint to the ethics committee filed by a New Jersey Republican county chairman in November.

Menendez’s office revealed this week that last month he personally reimbursed Melgen more than $58,000 for the trips. A spokesman said the senator could have sought to use an exemption that allows travel on aircraft owned by friends.

But Sloan and a former attorney for the ethics committee said the rules also say such trips would have to be considered gifts and would have had to been disclosed on Menendez’s 2010 personal financial statement.

The fact that they were not could have exposed Menendez to a criminal penalty of filing a false statement, Sloan said. By paying Melgen for the flights, that exposure likely goes away, but Senate ethics rules also require that repayment be made promptly, and two years later would not likely meet that definition.

Menendez’s office said all flights he took on Melgen’s plane “have been paid for and reported properly.”Email: jackson@northjersey.com Blog: northjersey.com/thepoliticalstate